Anxious Traders Map Out Strategies for Monday Market Turmoil

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(Bloomberg) -- With the fate of Credit Suisse Group AG finally decided, investors were getting ready for another gut-wrenching week of trading.

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With just hours to go before Asian markets opened, money managers talked to nervous clients, planned out strategies and organized their next trades. Many fired up their workstations from home, settling in for a long night, and made plans to be at the office before dawn.

“In the last hour, I had already few calls with fund managers and one big client,” said Alberto Tocchio, a fund manager at Kairos Partners in Milan. “From now until late night, I will be attached to the news trying to understand what to do in the early morning.”

While the news of UBS Group AG’s takeover of Credit Suisse brings some relief traders who were worried about going into Monday without a deal, there’s still plenty of anxiety on Wall Street. The turmoil at Credit Suisse and the collapse of three regional lenders has fanned concern about the health of the banking industry and revived memories of the 2008’s financial crisis.

‘Unknown Unknowns’: No Weekend for Traders as Bank Woes Persist

Credit Suisse shares have been hurt by a spiral of negative news in the past few years, with the stock down 98% from its peak in 2007, a drop in nearly $90 billion in market capitalization over that period. Last week’s renewed selloff in the Swiss lender’s shares — in the wake of the collapse of three US regional banks — triggered a 12% plunge in the European banking sector index over the week.

Retail clients and institutions are increasingly worried about where their money is being held, said Mark Grant, chief global strategist at Colliers Securities. He said he’s urging clients to be conservative because of the instability that he sees in the financial system that’s been created by central banks rapidly hiking rates.

“I’ve had a lot of calls over the weekend from clients and institutions,” he said. “We’ll see in the morning how things are, but I don’t expect them to be too good.”

Anthony Cohen, a senior listed derivatives broker at Market Securities, has taking calls from clients who want to trade at the market open. “I never witnessed such volatility on bonds and stocks until now,” he said from Dubai. “However, I don’t feel the panic yet in the way clients are trading.”

For other traders, the turmoil means opportunity. Andrea Tueni, head of sales trading at Saxo Banque, said he relished the chance to start trading on Monday.

“Personally, I feel it’s quite nice when there’s action,” he said. “Of course, no one is rejoicing that it’s being tough for some. But the market environment before that was flat with a inflation-recession-central banks combo and it was quite repetitive.”

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